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Critics warn the new WTO deal could wipe out industries and cause job losses around the world [AFP]
|Commerce ministers from around the world have approved a World Trade Organisation agreement to lower trade barriers that they hailed as a “historic” boost for the trade body.
The agreement reached on Saturday in Bali, Indonesia, falls far short of WTO’s vision of dismantling global trade barriers through the 12-year-old Doha Round of talks.
But the accord reached on the Indonesian resort island of Bali nevertheless marks the first global agreement struck by the Geneva-based body since its 1995 founding.
“For the first time in our history, the WTO has truly delivered,” Roberto Azevedo, WTO director-general, told a closing ceremony.
“We’re back in business … Bali is just the beginning.”
Al Jazeera’s Step Vaessen, reporting from Jakarta on Saturday, said reaching the agreement was “very difficult.”
She said India resisted part of the deal covering agriculture, and Cuba walked away from the meeting at the last minute.
“But everything came together at the last minute and it is now a historic deal. It was a very, very tough negotiation.”
The pact includes commitments to facilitate trade by simplifying customs procedures.
The Washington-based Peterson Institute for International Economics estimated in a report this year the customs measures could create $1tn in economic activity and 21 million jobs if properly implemented.
WTO officials have conceded, however, that uncertainty surrounded how effectively the measures would be implemented, especially in underdeveloped countries.
Analysts say the hard-fought nature of the talks indicates how difficult it could be for the body to make real progress on the Doha Round, launched in Qatar in 2001.
Days of haggling
The agreement was reached after more than four days of haggling in Bali that stretched past the conference’s Friday deadline and overnight.
Gita Wirjawan, Indonesia’s trade minister, called the accord “historic”.
Azevedo said it had important symbolic value for Doha.
“The decisions we have taken here are an important stepping-stone toward the completion of the Doha Round,” he said, adding the WTO would soon get to work on a “road map” for reviving Doha.
The Doha Round aims to remove hurdles to commerce and establish a globally binding framework of trade rules fair to both rich and poor countries.
But protectionist disputes among the WTO’s 159 members have foiled agreement.
Azevedo has expressed concern over the rise of alternative regional trading pacts that he fears could render the WTO obsolete if the Geneva-based body did not start clinching major worldwide agreements.
The Bali negotiations teetered repeatedly on the brink of collapse due to various differences.
India – which aims to stockpile and subsidise grain for its millions of poor – had demanded that such measures be granted indefinite exemption from WTO challenge.
The US, which implements large farm supports of its own, and others had said India’s grain policy could violate WTO limits on subsidies.
A later hurdle emerged as four Latin American countries objected to the removal in the accord’s text of a reference to the US embargo on Cuba.
Compromise wording smoothed over those hurdles.
Job losses feared
Critics say the sudden reduction of import taxes may wipe out industries, causing job losses in both rich and poor countries, our correspondent said.
The agreement will come as a major personal victory for the Brazilian Azevedo, who took the organisation’s helm in September and injected a sense of urgency into the talks.
“With this landmark accord on trade facilitation and other issues, the WTO has re-established its credibility as an indispensable forum for trade negotiations,” the US Chamber of Commerce said in a statement released in Washington.
The package also included pledges to limit agricultural subsidies, and policies to aid least-developed countries.
As the Doha Round has faltered, alternative regional pacts have emerged between major trading nations, such as the 12-country Trans-Pacific Partnership (TPP) spearheaded by the US.
TPP negotiators hold their latest meeting in Singapore starting on Saturday as they work to figure out the outlines of that trade alliance.
Azevedo has said such alliances could have “tragic” consequences on poor nations by denying them a place at the trade-rules table.
Negotiators are poised to seal the first global trade deal for more than a decade, in a rare victory for the World Trade Organisation, whose struggle to secure an international pact has increasingly threatened its relevance.
The US and powerful developing-nation players, including China and India, have overcome differences in agriculture. This leaves negotiators in Geneva to put the final touches to a deal that will impose binding requirements to reduce red tape and ease the path for goods at borders around the world.
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IN GLOBAL ECONOMY
It could add about $1tn to annual global trade worth more than $18tn, some analysts have said.
Roberto Azevêdo, the recently appointed head of the WTO, is expected to present a finished draft of the agreement to the body’s highest organ, the general council, in a meeting as soon as Sunday or Monday.
Barring any unforeseen problems – and negotiators gave warning on Thursday that they could still emerge – the agreement would be signed by trade ministers from the WTO’s 159 member countries in Bali next month. “They have crossed over the threshold,” said a senior trade official in Geneva.
Sealed, the deal would be a victory for Mr Azevêdo, who warned that the WTO risked irrelevancy if it did not deliver something substantive in Bali when took over in September.
The deal’s three broad pillars – tackling bureaucratic barriers at borders, a series of agriculture issues, and several development-related subjects – were plucked from the wider Doha agenda two years ago as watered-down but “deliverable” elements of a deal.
But they have still been the subject of difficult negotiations and officials and observers of the process insist the deal at hand is important in both substance and what it says about the state of the WTO as a forum for trade negotiations.
“We can do negotiations on a multilateral basis and deliver. That’s the big lesson,” one senior ambassador to the WTO said.
Mr Azevêdo, a former Brazilian diplomat, and others want to use the deal to re-energise the now 12-year-old Doha Round of trade negotiations which for years has been stalled due to differences between the US and developing world countries over agriculture.
The biggest element of the Bali deal is the chapter on “trade facilitation”, WTO jargon for removing bureaucratic barriers at borders. It will set binding standards for WTO members on matters such as how long goods should take to clear borders, how customs officials can charge tariffs and penalties and what paperwork can be required at borders.
Some details of the facilitation deal need to be finalised, such as how poor countries should be required to meet the obligations. Mr Azevêdo is due to present a potential wording on that issue to negotiators on Friday and officials in Geneva expect negotiations through the weekend.
But the most prickly issues in Geneva have been related to agriculture and involved India, China, and Argentina.
After months of haggling, negotiators earlier this week settled on a four-year “peace clause” that will give India and other countries latitude to buy staples from farmers and operate food programmes for the poor.
The US and China have also agreed to set aside a dispute over certain agricultural tariffs, while Argentina appeared set to allow compromise language linked to eliminating subsidies for agricultural exports, a long-standing bone of contention in the developing world.